Is This Pharmaceutical Giant a Buy After a Major Acquisition?

• Merck's newest acquisition could assistance it motorboat a promising flu candidate.

• Several different ongoing developments are helping overgarment a agleam post-Keytruda picture.

• Merck is besides an fantabulous dividend payer.

• 10 stocks we similar amended than Merck ›

Are things yet looking up for Merck (NYSE: MRK)? After being mostly southbound for the amended portion of the past 2 years, the pharmaceutical elephantine is showing signs of life. Over the past month, its banal has climbed 27% owed to respective developments, including yet different acquisition that arguably improves its prospects.

Should investors expect the momentum to continue? And is the institution inactive a coagulated buy-and-hold option? Let's find out.

Influenza has been astir for a agelong time, and respective vaccines are disposable to assistance support against this virus. Unfortunately, their effectiveness leaves overmuch to beryllium desired. According to the U.S. Centers for Disease Control and Prevention (CDC), during the 2023-2024 flu season, vaccines were 44% effective. That's not astatine each an outlier erstwhile looking astatine the past decade: The highest efficacy complaint implicit this play was 60%, with the lowest being a meager 19%. Clearly, there's country for betterment successful this area. And respective companies are moving connected that project.

Some, similar Pfizer, are seeking to make mRNA-based flu vaccines. Here's wherefore this attack could work: mRNA vaccines are faster to manufacture than accepted ones, which means scientists tin hold until person to the commencement of the flu play to take which strains of the microorganism to include. Having to foretell circulating strains months successful beforehand with accepted candidates is 1 of the cardinal reasons existent flu vaccines aren't effective.

However, determination is yet different approach. That brings america backmost to Merck, which precocious agreed to get Cidara Therapeutics (NASDAQ: CDTX), a smaller biotech institution processing a promising flu candidate, for astir $9.2 cardinal successful cash. Cidara's CD388 isn't an mRNA-based product. Strictly speaking, it isn't adjacent a vaccine. It's a long-acting antiviral cause that could confer extortion against influenza -- and crossed galore antithetic strains of the microorganism and for a broader acceptable of individuals -- for longer periods than accepted flu vaccines.

In different words, CD388 could revolutionize a marketplace that inactive has plentifulness of enactment to beryllium done. During the 2023-2024 flu season, determination were 470,000 flu-related hospitalizations and 28,000 deaths, according to the CDC. CD388 has performed good successful signifier 2 studies and is present undergoing pivotal objective trials. If it's approved, it could easy transcend blockbuster status.